“There are almost no investment geniuses. The only ones I know of are Warren E. Buffett and John C. Bogle and JIM ROGERS” ~ Ben Stein, New York Times

“Jim Rogers – understands the great trends of the world like none other” ~ Warren Buffett

Legendary investor Jim Rogers is back with his sixth book: “Street Smarts – Adventures on the Road and in the Markets”! Published in the spring of 2013, this book is a recollection and a self-styled memoir of Rogers’ own life, investment experiences and his observations from his many travels around the globe.

While there were many book reviews done on Rogers’ latest book since it’s release, BillionaireInvestor would be drawing some takeaways and educational insights from the book itself (which is littered with investment wisdom):

Invest In What You Know Best

Rogers writes, “The way you become a successful investor is by investing only in what you yourself have a wealth of knowledge about. Everybody knows a lot about something. Cars, fashion, whatever it is. . . just take a look at your daily life. Concentrate on what you know. . . you will see a major change coming long before anybody on Wall Street will.”

The shrewd investor only invests in things that he understands. They want to know how the returns on their capital are generated, and only by understanding thoroughly and doing their due diligence can they know how their money is made. This remains an essential habit of all successful investors – making them known for an area of expertise (a niche) or what psychologists call a circle of competence. Sticking to what you know best will ensure that you operate in an area that you know you have an edge over others – and that is how money is made.

Additionally, operating within your own circle of competence takes a lot of discipline to wait for the right investment opportunities. As Rogers writes, “most successful investors do nothing most of the time. Do not confuse movement with action. Know when to sit and wait.”

Resist Diversification

True to his own contrarian investment philosophy, Rogers writes that the winning investor does not diversify. This does not mean that an investor should “put all eggs into one basket,” – it simply implies that great investors run concentrated portfolios. He writes, “if you want to make a lot of money, resist diversification. Brokers promote the motion that everybody should diversify. But that is mainly to protect themselves. The way to get rich is to find what is good, focus on it, and concentrate your resources there. But make very sure you are right.” In the early 1980s, Rogers, after doing his research on Europe, sensed that a great bull market is about to take off in West Germany, and he put a big portion of his net worth into German financial assets, and was rewarded greatly in the following few years when both German fixed income and equity markets took off in a secular bull market.

This could also be a follow-up point from the previous takeaway about investing in things you know best. The professional investment industry in recent times have touted diversification as a way or preserving investment portfolios – which isn’t a totally invalid idea. However, most investors these days are diversifying for purely diversification purposes and diversifying into things that they do not understand, which in the long run, could also be dangerous (because it implies an increase in risk exposures).

Look Where Others Don’t Want To

Being a contrarian investor, Rogers believes that opportunities are abundant in places or areas which most people ignore or overlook. In the investment world, places or areas where the majority of investors tend to overlook usually are markets or segments where they haven’t been performing, or aren’t exciting (usually because they have been under-performing) and dull in nature.

Throughout the mid 1980s to the late 1990s, commodity prices (represented via prices of commodity futures contracts) as a whole continued to fluctuate along with business cycles, but Rogers noticed that the overall trend for 18+ years was downwards. Not much new investments were made to improve capacity and not many businesses were going into the resources and materials industries, and Rogers’ research showed that the much of the known financial world do not have many investment vehicles that allow investors to gain direct exposures to commodities (indicating the lack of interest from the investment community). Sensing a great bottom in the commodities market, Rogers started his own commodity index in 1998 and started to heavily invest in the segment – and the rest is history, with the start of the recent commodity super-cycle that roared through the 2000s for a decade. This is a classic example of looking where others don’t want to or ignore, and checking if the crowd’s ignorance is unwarranted and wrong.

“Street Smarts – Adventures on the Road and in the Markets” is still sold in bookstores, and its a light read, with many readers feeling as if Rogers is talking to them about his own experiences and memories. It definitely is a worthy finance read for both finance and non-finance professionals that can easily be read in a cafe over the weekends or simply at the beach side.

Warren Buffett and George Soros both started with nothing – and made billion-dollar fortunes solely by investing.

But their careers seem as opposite as night and day. Buffett buys bargain-priced stocks and businesses for cash – and likes to own them “forever.” Soros is renowned for his highly-leveraged, quick-footed bets in the currency markets.

What could they possibly have in common?

As Mark Tier demonstrates in this path-breaking book, Buffett and Soros both practice exactly the same mental habits and strategies – the same attitudes that guided Peter Lynch, Sir John Templeton, Bernard Baruch, Benjamin Graham and all the other successful investors and traders Tier has studied and worked with. Without exception.

In this book, you’ll find how investment success – or disappointment – flows from your mental habits and mental strategies. So if you haven’t been getting the results you want, you’re probably not practicing The Winning Investment Habits of Warren Buffett and George Soros. What’s more, every one of these habits is something you can easily learn yourself. Discover how the mental habits that guided your last investment decision stack up against those of Buffett and Soros. And then learn exactly what you need to do to adopt their winning investment habits – and transform your own investment performance. Their mental habits fly in the face of conventional Wall Street “wisdom”:- Buffett and Soros don’t diversify. When they buy they always ‘buy as much as they can.’

– Both will tell you that making predictions about the market or the economy has virtually nothing to do with their success.

– They don’t believe that to make big profits you must take big risks. In fact, both are far more focused on not losing money than making it. Yes, Soros is risk-averse!

– And all those research reports that Wall Street churns out – they never read them. They don’t give a hoot what other people think.

Find out more with this book!

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